Aug 5, 2010

BW Plantation considers bond issue

Publicly listed CPO player PT BW Plantation Tbk (BWPT) considers to issue IDR bond or secure bank loan facility in a bid to underpin expansion plan in 2011 and 2012.
BW Plantation Corporate Secretary Kelik Irwantono said the company will combine the external financing facilities with internally generated cash.
"We calculate BW Plantation requires US$45 million of expansion expenses both in 2011 and 2012. It would be better if we could secure the financing at the end of 2010 or early next year," he said.
BW Plantation aims to set new planting at 10,500 hectares of land next year as well as build another new CPO refinary with 45 tons capacity of fresh fruit bunch (FFB) per hour in Central Kalimantan. The company currently runs two CPO refinaries with production capacity of 105 tons of FFB per hour.
"Additional new refinery will boost capacity to 150 tons per hour," Kelik said.
In a researh report published by CLSA Asia-Pacific Markets on August 3, CLSA analysts Vera Ongyono and Wilianto Ie set a 12 month price target of BW Plantation at IDR1,100 per share in the next 12 months, above 30,95% of market closing today at IDR840 per share.
The report revealed that BW Plantation is a well managed plantation with an outstanding FFB yield achieved in 2009, albeit from low base. 
It offers a significant potential growth with mature hectare will grow by 32% compounded annual growth rate (CAGR) until 2013.
This will allow FFB production to double to 700,000 tonnes within 4 years. "The company hasn’t established its track record, but at US$8,800 EV/ha and 10.1x 2011 PER, it is looking very attractive."
 
Disclosure: No position at the stock mentioned above.

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